Modest Gains In Asian Markets

Asian stock markets are mostly higher on Wednesday following the positive cues overnight from Wall Street. However, gains are modest in most markets as investors awaited the results of the U.S. midterm elections.

The elections will decide control of both the House and the Senate and could have a major impact on President Donald Trump’s ability to enact his pro-business agenda. U.S. stock futures rose amid indications that Republicans have a chance of taking not only the House, but also the Senate.

The Australian market is declining despite the positive cues from Wall Street as weak commodity prices dragged resources stocks lower, offsetting gains by banks. Investors are also cautious as they await the outcome of the U.S. midterm elections.

The benchmark S&P/ASX 200 Index is declining 20.20 points or 0.34 percent to 5,855.00, after touching a low of 5,844.60 earlier. The broader All Ordinaries Index is down 19.70 points or 0.33 percent to 5,939.00. Australian stocks also ended notably higher on Tuesday.

Among the major miners, BHP and Fortescue Metals are declining more than 1 percent each, while Rio Tinto is down 0.7 percent.

Oil stocks are also weak after crude oil prices fell for a seventh straight session overnight. Santos is losing 1 percent, while Woodside Petroleum and Oil Search are down almost 1 percent each.

Gold miners are mixed after gold prices declined overnight. Newcrest Mining is lower by 0.7 percent while Evolution Mining is rising almost 2 percent.

Meanwhile, the big four banks are advancing. National Australia Bank, ANZ Banking and Westpac are higher in a range of 0.2 percent to 1.2 percent.

Commonwealth Bank reported a 4.8 percent decline in full-year profit, hit by more than A$1 billion in anti-money laundering fines, customer remediation and royal commission costs. However, the bank’s shares are rising 0.5 percent.

Bega Cheese said it plans to vote in favor of selling its 15.6 percent stake in Capilano Honey to a China-focused consortium. The company’s shares are declining more than 1 percent.

Kogan.com has signed a deal to distribute a March & McLennan-owned Mercer product under the Kogan brand, signalling its entry into Australia’s A$2.7 trillion superannuation industry. However, the online retailer’s shares are losing almost 4 percent.

On the economic front, Australia will see October results for the Performance of Construction Index from the Australian Industry Group today.

In the currency market, the Australian dollar rose to a five-day high against the U.S. dollar on Wednesday. The local currency was quoted at $0.7236, up from $0.7216 on Tuesday.

The Japanese market is extending gains from the previous session following the positive lead from Wall Street and on a weaker yen. Investors are now looking ahead to the outcome of the U.S. midterm elections.

The benchmark Nikkei 225 Index is advancing 179.99 points or 0.81 percent to 22,327.74, after rising to a high of 22,380.87 in early trades. Japanese shares showed a strong move to the upside on Tuesday.

The major exporters are mostly higher as the yen weakened. Panasonic is rising more than 1 percent, Mitsubishi Electric is adding 0.2 percent and Sony is edging up 0.1 percent, while Canon is down 0.4 percent.

In the tech sector, Advantest is gaining almost 2 percent, while Tokyo Electron is down 0.5 percent.

Among auto makers, Toyota is rising almost 2 percent after recording a 28 percent in profit for the September quarter and raising its full-year outlook, while Honda is lower by almost 1 percent.

In the banking sector, Sumitomo Mitsui Financial is higher by 0.5 percent and Mitsubishi UFJ Financial is advancing almost 1 percent.

In the oil space, Japan Petroleum is losing more than 1 percent and Inpex is down 0.2 percent after crude oil prices fell for a seventh straight session overnight.

Among the other major gainers, Nichirei, Yokogawa Electric and Dena Co. are gaining more than 8 percent each, while Nippon Telegraph & Telephone is rising almost 6 percent.

On the flip side, Takara Holdings is losing almost 9 percent, Mitsubishi Materials is lower by more than 8 percent and Daikin Industries is down almost 5 percent.

In economic news, Japan will see preliminary September results for its leading and coincident indexes as well as September results for real and labor cash earnings.

In the currency market, the U.S. dollar is trading in the upper 113 yen-range on Wednesday.

Elsewhere in Asia, South Korea, Singapore, Hong Kong, Taiwan, Indonesia and Malaysia are also modestly higher, while Shanghai and New Zealand are edging lower.

On Wall Street, stocks closed higher on Tuesday, continuing to recover from the sell-off seen in October. However, traders seemed reluctant to make more significant moves amid uncertainty about the outcome of today’s highly anticipated midterm elections and as they looked ahead to the Federal Reserve’s monetary policy announcement due on Thursday.

The Dow advanced 173.31 points or 0.7 percent to 25,635.01, the Nasdaq climbed 47.11 points or 0.6 percent to 7,375.96 and the S&P 500 rose 17.14 points or 0.6 percent to 2,755.45.

The major European markets moved to the downside on Tuesday. While the German DAX Index edged down by 0.1 percent, the French CAC 40 Index fell by 0.5 percent and the U.K.’s FTSE 100 Index slid by 0.9 percent.

Crude oil prices drifted lower on Tuesday, extending their slide to a seventh successive session. WTI crude for December lost $0.89 or 1.4 percent to close at $62.21 a barrel on the New York Mercantile Exchange.